Apple Pickers or Federal Judges: Strong versus Weak Incentives in Physician Payment

Kronick, Richard; Casalino, Lawrence P.; Bindman, Andrew B.

doi:10.1111/1475-6773.12424

Cited by 11 publications

(12 citation statements)

References 16 publications

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“…Pure fee-for-service based payments, although highly prevalent, have come under widespread criticism. Decades ago, the well-known Professor of Economics Burton Weisbrod argued: "Payments based on the level of activity are suitable for paying apple pickers, but not physicians" 12 . For several reasons, it makes sense to use strong incentives for apple pickers: It is easy to measure whether they are delivering the desired product, and the cost of measurement is low.…”

Section: A N U S C R I P T C O P Ymentioning

confidence: 99%

“…For several reasons, it makes sense to use strong incentives for apple pickers: It is easy to measure whether they are delivering the desired product, and the cost of measurement is low. The product of apple picking is well defined and precise, so there is little concern that rewarding apple picking diverts attention away from other activities that an employer would want apple pickers to carry out 12 .…”

Section: A N U S C R I P T C O P Ymentioning

confidence: 99%

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Payment systems and incentives in dentistry

Grytten

2016

Comm Dent Oral Epid

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In this commentary, we discuss the advantages and disadvantages of the following incentive-based remuneration systems in dentistry: fee-for-service remuneration, per capita remuneration, a mixed payment system (a combination of fee-for-service remuneration and per capita remuneration) and pay-for-performance. The two latter schemes are fairly new in dentistry. Fee-for-service payments secure high quality, but lead to increased costs, probably due to supplier-induced demand. Per capita payments secure effectiveness, but may lead to under-treatment and patient selection. A mixed payment scheme produces results somewhere between over- and under-treatment. The prospective component (the per capita payment) promotes efficiency, while the retrospective component (the fee-for-service payment) secures high quality of the care that is provided. A pay-for-performance payment scheme is specifically designed towards improvements in dental health. This is done by linking provider reimbursements directly to performance indicators measuring dental health outcomes and quality of the services. Experience from general health services is that pay-for-performance payment has not been very successful. This is due to significant design and implementation obstacles and lack of provider acceptance. A major criticism of all the incentive-based remuneration schemes is that they may undermine the dentists' intrinsic motivation for performing a task. This is a crowding-out effect, which is particularly strong when monetary incentives are introduced for care that is cognitively demanding and complex, for example as in dentistry. One way in which intrinsic motivation may not be undermined is to introduce a fixed salary component into the remuneration scheme. Dentists would then be able to choose their type of contract according to their abilities and their preferences for nonmonetary rewards as opposed to monetary rewards. If a fixed salary component cannot be introduced into the remuneration scheme, the fees should be 'neutral'; that is, they should just cover the costs of the services provided. This is one way in which supplier-induced demand can be limited and costs contained.

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Section: A N U S C R I P T C O P Ymentioning

confidence: 99%

Section: A N U S C R I P T C O P Ymentioning

confidence: 99%

Payment systems and incentives in dentistry

Grytten

2016

Comm Dent Oral Epid

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“…Finally, caution must be taken in generalizing our results. The influence of performance incentives on value‐based reforms is likely context‐dependent and depends on the exact nature of the incentives (e.g., bonus size, likelihood), programs (e.g., incentivized measures, beneficiary population), and timing (e.g., early versus late adoption; Kronick, Casalino, and Bindman ; Wu et al. ).…”

Section: Discussionmentioning

confidence: 99%

“…Finally, caution must be taken in generalizing our results. The influence of performance incentives on value-based reforms is likely context-dependent and depends on the exact nature of the incentives (e.g., bonus size, likelihood), programs (e.g., incentivized measures, beneficiary population), and timing (e.g., early versus late adoption; Kronick, Casalino, and Bindman 2015;Wu et al 2016). Although we seek to evaluate whether past exposure to incentives can encourage and facilitate participation in Medicare's value-based reforms, these relationships will likely change as the scale and scope of ACOs, Physician Compare, and Meaningful Use evolve and are consolidated into the MIPS and APM payment pathways.…”

Section: Figure 1: Average Marginal Effect Of Financial Incentives Onmentioning

confidence: 99%

Financial Incentives and Physician Practice Participation in Medicare's Value‐Based Reforms

Markovitz

Ramsay

Shortell

et al. 2017

Health Services Research

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Physicians organizations' prior experience and success with performance incentives were related to participation in Medicare ACO arrangements and participation in the meaningful use criteria but not to participation in Physician Compare. We conclude that Medicare must complement financial incentives with additional efforts to address the needs of practices with less experience with such incentives to promote value-based payment on a broader scale.

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“…Our research agenda attempts to address the “apple picker” analogy proposed by Kronick, Casalino, and Bindman () in the context of payment to physicians , rather than to systems . A substantial literature compares the performance of HMOs and FFS settings (Luft ; Miller and Luft , ).…”

Section: Underlying Assumptions and Focusmentioning

confidence: 99%

Policy‐Oriented Research on Improved Physician Incentives for Higher Value Health Care

Luft

2015

Health Services Research

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Policy makers (both public and private) are seeking ways to improve the value delivered within our health care system, that is, using fewer resources to provide the same benefit to patients, or using equivalent resources to provide more benefit. One strategy is to alter the predominant fee‐for‐service (FFS) economic incentives in the current system. To inform such policy changes, this paper identifies areas in which little is known about the effects of specific incentives (FFS, salary, etc.) on the two components of value: resource use and quality. Specific suggestions are offered regarding research that would be informative for policy makers, focusing on fundamental “building block” studies rather than overall evaluations of complex interventions, such as accountable care organizations. This research would better identify critical aspects of the FFS model and salary‐based payments that are particularly problematic, as well as situations in which FFS or salary may be less problematic. The research would also explore when alternatives, such as episode‐based payment might be feasible, or simply be hypothetical solutions. The availability of electronic health record‐based data in various delivery systems would allow many of these studies to be accomplished in 3–5 years with budgets manageable by public and private funding sources.

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Apple Pickers or Federal Judges: Strong versus Weak Incentives in Physician Payment

Cited by 11 publications

References 16 publications

Payment systems and incentives in dentistry

Payment systems and incentives in dentistry

Financial Incentives and Physician Practice Participation in Medicare's Value‐Based Reforms

Policy‐Oriented Research on Improved Physician Incentives for Higher Value Health Care

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